Why Did the Monetary Base Increase Rapidly During the Economic

question 58

Multiple Choice

Why did the monetary base increase rapidly during the economic crisis of 2008?

• A) The Fed sold financial assets and extended fewer loans.
• B) The Fed increased both its purchase of assets and quantity of loans extended.
• C) The Fed increased its purchases of assets, but offset this with an increase in the reserve requirement.
• D) The Fed sold financial assets, but offset this with a reduction in the reserve requirement.

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Definitions:

Beta Particle

An electron or positron, characterized by its high speed and energy, released by an atomic nucleus undergoing radioactive decay.

Gamma Ray

High-energy electromagnetic radiation emitted by atomic nuclei during radioactive decay, with higher energy than X-rays.

Radiation Sickness

A serious illness caused by excessive exposure to ionizing radiation, affecting the skin, gastrointestinal tract, and bone marrow.

Radioactivity Emissions

The process by which unstable atomic nuclei lose energy by emitting radiation, including alpha particles, beta particles, and gamma rays.